WASHINGTON — The American Road and Transportation Builders Association will focus on a potentially trend-setting challenge to a prominent Virginia public-private partnership at the group's innovative finance conference July 24-26.
"At issue is a May 1 declaration by Virginia circuit court judge James A. Cales Jr., that the tolling provisions of the Elizabeth River Crossing project and others established under the Virginia Public-Private Transportation Act, violate the state's constitution," ARTBA said in a release. "The ruling is significant because the Virginia PPTA [public-private transportation act] tolling provisions are similar to those used in a number of other states and could provide a blueprint for opponents to challenge P3s nationally."
A panel of experts will discuss the case, which revolves around one of the largest and most complex public-private financings in the U.S. Weeks after receiving the 2012 North America Toll Road Deal of the Year award from Project Finance Magazine, the $2.1 billion tunnel project linking Portsmouth and Norfolk in southeast Virginia suffered a potentially major setback when Cales ruled that the state legislature had overstepped its bounds by giving the Virginia Department of Transportation free reign to set tolls backing the project's bonds and Transportation Infrastructure Finance and Innovation Act loan.
If Cales' decision stands, the project will not be able to collect the tolls backing the debt.
Credit analysts have said the commonwealth will be on the hook for all of the project's debt if Elizabeth River Crossings, a joint venture of Australia-based Macquarie Group Ltd. and Sweden-based Skanska Infrastructure Development, is unable to pay the holders of the project's more than $600 million of private activity bonds.
VDOT has appealed the decision to the Virginia Supreme Court, which will hear oral argument in its September session, said Robert Cynkar, an attorney involved in the case against VDOT.
Both sides agreed to an expedited appeal, which the court granted, Cynkar said.
ARTBA is still working to finalize the participants, said spokesman Beth McGinn.
"The parties and attorneys directly involved in the litigation are not necessarily able to participate because it will be ongoing, but we will have several experts that are close with the case discussing it directly, and national ramifications," she said.
The conference will also feature other discussions on hot P3 topics, such as financing structure and the application of P3 financing in transit, ports, and waterways. It will be held at the Grand Hyatt hotel in Washington.
